Who can invest in an OFS?

In an Offer for Sale (OFS), the following categories of investors can participate:

1. Retail Investors: These are individual investors whose total bid value is less than Rs 2 Lakhs in the OFS. Retail investors typically include individual retail traders and investors.
2. Institutional Investors: This category includes entities such as:
   1. Mutual Fund Companies
   1. Insurance Companies
   1. Foreign Institutional Investors (FIIs)
   1. Pension Funds
   1. Alternative Investment Funds (AIFs)
   1. Qualified Institutional Buyers (QIBs)
   1. Bodies Corporate
   1. Banks and Financial Institutions

The Securities and Exchange Board of India (SEBI) has set special regulatory standards and reservation percentages for institutional investors, who typically participate in greater quantities.

By participating in an OFS, these investors can buy shares directly from a company’s promoters or shareholders, usually at a floor price or a discounted rate determined by the seller.